Breaking News
0

Oil Set for Worst 2-Day Drop Since July as Stock Turmoil Spreads

CommoditiesOct 11, 2018 02:01AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

(Bloomberg) -- Oil headed for the biggest two-day drop since July, with fuels from diesel to gasoline also declining as fears over a worsening trade war rattled markets across the board.

Futures dropped as much as 1.8 percent in New York, after sliding 2.4 percent Wednesday. As trade tensions between the U.S. and China escalate, investors are shunning risk assets from equities to oil on fears over slowing growth. The S&P 500 Index slumped the most since February while the Nasdaq 100 Index had its worst day in seven years. Meanwhile, Hurricane Michael became the strongest storm to hit the U.S. mainland since 1992 as it made landfall in Florida, slashing fuel demand in the Southeast.

“It’s a typical spillover effect and oil’s been hit by the widespread sell-off in risk assets as the intensifying trade row stokes concerns over sluggish global demand,” Will Yun, a commodities analyst at Hyundai Futures Corp., said by phone. “If it were not for the trade dispute, the oil market probably would have kept its momentum on lingering supply risks.”

Crude had surged to a four-year high earlier this month with impending American sanctions against Iran set to curtail exports from the OPEC’s third-largest producer. U.S. President Donald Trump has repeatedly demanded the Organization of Petroleum Exporting Countries pump more to temper prices. While the rally has eased, traders continue to speculate whether the cartel and its allied producers can offset dwindling supplies from Iran to Venezuela.

West Texas Intermediate for November delivery declined as much as $1.32 to $71.85 a barrel on the New York Mercantile Exchange, and was at $71.92 at 12:14 p.m. in Seoul. Prices are on course for the worst two-day slide since July 17 after closing at the lowest level since Sept. 27 on Wednesday. Total volume traded was about 65 percent above the 100-day average.

Brent for December settlement was $1.52 lower at $81.57 a barrel on the London-based ICE Futures Europe exchange, after falling $1.91 on Wednesday. The global benchmark crude traded at a $9.78 premium to WTI for the same month.

See also: U.S And China Jockey for Global Support as Trade War Ramps Up

In equity markets, both the S&P 500 Index and the Dow Jones Industrial Average slipped more than 3 percent, while the Nasdaq 100 Index fell as much as 4.5 percent. The rout continued into Asian hours, with equity benchmarks from Japan to Hong Kong plunging.

In the U.S., Hurricane Michael has curtailed 40 percent of offshore crude output in the Gulf of Mexico this week, and is set to cause as much as $16 billion in damage. Gasoline futures dropped as much as 2 percent to $1.9808 a gallon, sliding for a third day. Demand for the motor fuel typically falls in the wake of a hurricane because roads become impassable and filling stations end up without power. Diesel slumped more than 1 percent.

Oil Set for Worst 2-Day Drop Since July as Stock Turmoil Spreads
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email